It is mid-2025, and I find it astounding that many investors still have a daily SIP or a weekly SIP running! I cannot understand who or what influenced them to do so. However, I can assure you that there are no special benefits to running a daily or weekly SIP compared to a monthly, quarterly, or even annual SIP.
First of all, there is no “averaging benefit” from ANY SIP. A SIP does not help you get better returns or lower risk in any way. It is just an automated way of purchasing mutual fund units at a defined frequency. See: Myth Busted: SIPs do not reduce risk or enhance returns!
Suppose you start a monthly SIP of Rs. 1000 today. After 24 months, the amount invested will be Rs. 24000. This is a substantial lump sum compared to the monthly investment. This lump sum (getting bigger each month) will move up and down due to market forces. If there is a bull run, you get big returns. If there is a bear market, you should expect poor returns or losses. This is true regardless of the investment period, whether 10 years or 20 years or longer. See: Long-term investing in equity comes with no guarantees of success! And, Do not expect returns from mutual fund SIPs! Do this instead!
I am not saying do not invest in equities! I am only saying that you should not assume you will always get high returns just because you stay invested for the long term.
I am also not against SIPs either. Just don’t assume they offer you any special benefits. They do not.
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With that said, let’s now compare daily SIPs, monthly SIPs and quarterly SIPs. This is the third such study we have published.
- Comparing SIP Returns: Monthly vs. Daily vs. Quarterly SIPs
- Will a daily SIP provide better averaging benefits than a monthly SIP?
Comparison of Daily SIP vs Monthly SIP vs Quarterly SIP over 30.5 years
Please note, the CAGR mention in the figure is an XIRR (annualized return)
It should be clear without additional commentary that the only “extra” benefit of daily (or weekly) SIPs is the longer account statement.
Rolling 10-year Return (XIRR) Comparison of Daily SIP vs Monthly SIP vs Quarterly SIP
We examine 42 10-year periods spanning from January 1995 to June 2025.
Some say, “What is the harm in doing a daily SIP?” Experience has taught me that if people want to complicate their lives despite the evidence, it is best to step aside with a ‘good luck’.
To those who appreciate common sense backed by data, please stop your daily or weekly SIPs. Convert them to monthly SIPs, or, better still, push yourself to invest more and more manually each month. That is true discipline. If I can’t spend 1 minute of my time making a manual mutual fund transaction each month, I do not deserve wealth.
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About The Author
Dr M Pattabiraman giving a lecture
Dr M. Pattabiraman (PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over 14 years of experience publishing news analysis, research and financial product development. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free, AUM-independent investment advice.
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Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (Published by CNBC TV18) for DIY investors.
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Most investor problems stem from a lack of poor decision-making. We made bad decisions and money mistakes when we started earning, and we spent years undoing them. Why should our children go through the same pain?
What is this book about? As parents, what if we had to groom one ability in our children that matters not only for money management and investing but for every aspect of life? My answer: Sound decision-making. So, in this book, we meet Chinchu, who is about to turn 10. The story follows what he wants for his birthday and how his parents plan it, while also teaching him key ideas about decision-making and money management.
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